The Country Development: Nepal

Shangri-La, the Kingdom of the Himalayas, Gateway to Everest. Few places on Earth are as idealized in the West as Nepal. Upon arriving in the ancient capital of Kathmandu, Nepal is very likely to take your breath away. But this would be the smog fumes mixing with the chemical smell of city-urchins snorting glue, and not the view of the mountains. Particularly since the Himalayas have not been visible from the Kathmandu Valley for decades. Wiping away the rose hued glaze of applied mystique , the Nepal that remains is one that grapples daily (beginning at five am, an hour after the street dogs cease baying and an hour before the autorickshaws begin coughing) with a headlong rush into the modern world whilst trying to actually develop along the way.

Nepal is running away from its past with great determination and no destination. From 1996 to 2006 this running was often done at gunpoint. In February of 1996, Maoist rebels launched an armed struggle to replace Nepal’s constitutional monarchy with a communist republic. Given Nepal’s endemic Royal corruption, caste and ethnic discrimination, deep rural poverty , and a near total concentration of power and wealth in the Valley, the Maoist’s call to rewrite the nation resonated across the plains, the hills and the mountaintops, affecting all segments of the Nepali population. By the time that decade had run its course, 300 years of Nepalese monarchy was abolished and a Communist dominated parliamentary system was established. The Maoists introduced, often under duress, a multitude of measures aimed at addressing centuries-old, deeply-rooted forms of discrimination. The long standing feudal-caste system was dismantled and in parallel, a representative form of governance was introduced. The Maoist period also brought great social change as an embracing of one’s ethnic identity was encouraged. For the first time in millennia, gender roles were questioned as the insurgency actively promoted female involvement on the frontlines.

A closer look at the Maoists social oratory of hope and glory reveals, as is often the case, that all is not well for social development in Nepal. After the cessation of major violence in late 2006, poverty mitigation programs became a center talking point in all the newly-established political parties’ agendas. However, in harmony with most agenda goals in the Nepalese parliament, the key authorities stopped short of the necessary strong monetary commitment to both implement and monitor these programs. The social investment policy neglects the development of human capital by passing up the chance to create opportunities for future social development. Considering the poor to non-existent results from both targeted regional programs and broad national endeavors, thus far all available data supports the assertion that government social policy has thus far failed to increase economic opportunities for Nepal’s poor. Another integral and highly divisive socioeconomic issue that remains unsolved is the expansion of employment programs, including the incorporation of former insurgent combatants into the military. Lastly, Kathmandu has been tepid at the best of times in including conflict-ravaged populations into social and economic life. The question remains however, as to the state of the economy they are being reintroduced to.

Even the most rudimentary grasp of numbers allows an observer to comprehend the principle issue of the Nepali economy. Agriculture. It has been the mainstay of the economy for millennia, and is now fatally out of step with the demands of the 21st century. Agriculture provides livelihood to approximately 80% of the population and accounts for almost half of the country’s Gross Domestic Product (GDP). Geography has not been kind to the idea of farming , and only 16 percent of the total land is arable. While agriculture employs more than two thirds of the people and takes up almost half of the GDP, Nepal has the lowest per capita arable land in the world.

Food production in almost entirely confined in the south, in the narrow belt of what was once jungle and is now flatlands that borders India known as the Terai. Cultivation in more mountainous regions (which is to say the other 84% of Nepal) is mostly for subsistence. The fifth five-year plan, beginning in 1975 was the first in which agriculture beyond preventing starvation was given top priority. In order to increase agricultural production and diversify the farm base, the government began to focus on improving irrigation facilities, providing credit to and encouraging farmer to use imported, high yielding varieties of seeds, fertilizers, insecticides and pesticides, etc. However the complete lack of a transportation system designed to move quantities of food (or anything else for that matter) stymied the government efforts. Nepal also suffered near-catastrophic environmental collapse in the 1980s due to the absence of the requisite training in the aforementioned chemicals. The net result of these actions was that crop production grew at a dismal rate of 2.4%, failing to keep pace with the population growth rate, which began at 2.6% per annum. The degradation and divergence would not be correct in the years before civil war broke out and only began being redressed in late 2008.

In addition to agriculture, Nepal has a very limited industrial base that constitutes 20 per cent of the GDP. Most of those industries are agro-based industries like rice and tea. The majority of Nepal’s fledgling industrial base is dependent on imported raw materials, primarily from India. These manufactured goods are almost entirely small scale, local cottage industries. In Nepal, the term “capital goods” is quite literal, as whatever intermediate or capital goods are produced are locked up (quite literally) on the eastern plains of the Terai or in Kathmandu. However, Kathmandu is only the capital as long Nepal remains both a nation and a state, and given the political climate that threatens to wash away both of those concepts, a closer look at the Nepali government is warranted.

Politically, post-Maoist Nepal is defined by the fact that it is dependably unreliable. Indeed, Transparency International ranks Nepal 153th out of 180 in the organizations most recent Corruption Perception Index. This is reflected in the difficulties Nepal has had in writing a constitution. After establishing an interim constitution in 2007, the Constituent Assembly (CA) was slated to draft a permanent constitution within in a year. In late May of 2012, the CA was dissolved having extended the constitution writing deadline four times without a constitution being written. The country is now cast into even deeper political and legal uncertainty. By May of 2012, after squandering half a decade, the four major parties had come together in compromise on almost all issues. The issue that sent fissures through the CA and ultimately broke the government was whether or not the country should be divided into federal states along ethnic lines, as opposed to the 14 administrative zones, done for purely bureaucratic reasons that presently exist. Baburam Bhattarai , the current prime minister, has called for a new CA to be elected on November 22nd 2012. Effectively, this election stands to be a vote on the polarizing and highly volatile issue of ethnic federalism. Much of this uncertainty stems from the fact that in the span of 20 years, Nepal has gone from centuries of absolute monarchy, to a parliamentary monarchy, to anarchic civil war followed then by a tottering federal republic. Gazing across the myriad of social, economic and political concerns that shroud Nepal in cynicism, it is easy, far too easy, to not know what needs to be rectified first. The paramount concerns for Nepal are the development and sustaining of transportation infrastructure and power systems. From these two, all else flows. The significance of the ability to move and the power needed to provide that mobility is impossible to overstate.

According to the World Bank, the ratio of Nepal’s road area to population and total area is one of the lowest in the world. While large trucks clog all three of Nepal’s paved highways, they invariably have one of three destinations: Kathmandu, India or to a lesser extent, China. For the vast majority of the country, the most commonly used method of transportation is by porters with pack animals. It is almost blindingly simple, but it cannot be stressed enough, tourists, locals, potatoes, rice, bottled water, generators, medicines, troops , ideas, chickens, bricks, pipes, computers, aid workers, anything that can be used for development must first get to its location. As mentioned previously, Nepal has only three highways, constituting almost 90% of the country’s paved roads. The highway system (a word used in the most generous of terms) should be domestic infrastructure but is in fact anything but. The southern highway was built with Indian rupees for Indian gain, the northern highway built with Chinese renminbi for China to be able to drive tanks through Nepal should it need to invade India (its commonly nicknamed the “two tank road” among Nepalis) and the middle highway was constructed between Kathmandu and the tourist city of Pokhara, making it the only highway with both its terminus in-country It is important to note that all three of these highways, are by curse of topography, narrow two lane constructions. What this means in practical terms is that Maoist strikes, known as bandh are a powerful flexing of political power, affecting millions and causing massive disruptions to development. A key component of a bandh is closing the highway (used in the singular in Nepal), a task lacking in logistic difficulties and ways of circumventing it. The lack of transportation systems breeds political uncertainty, and discourages economic invests both foreign and domestic. Intertwined with problems of movement is the issue of how to power that movement.

Nepal is a nation left in the dark. Power generation, primarily electrical is the bedrock of development that must be established in tandem with transportation if Nepal is to have any chance of a brighter tomorrow. It is important to note that 63 percent of Nepalese households lack access to electricity and depend on expensive oil-based generators or simple forgo power altogether. Unlike Nepal’s lack of arable land, the country is not deficient in economically exploitable hydroelectric power. The mighty Himalayan mountains flow into thousands of equally mighty rivers. However, the hydroelectric potential of Nepal is rivaled only by its lack of hydroelectric power. According to USAID, the currently exploitable power stands at 83,000 megawatts (MW), but only 650MW have been developed. Nepal has but one all-season hydroelectric plant, with the ability to store energy generated during the summer monsoon for use during the rest of the year. This is of monumental importance as the other hydroelectric stations are at the mercy of water levels. With winter being the sun-lacking dry season, it is at precisely the time when demand for lighting and heating is highest that power cuts are at their most crippling. Across the country, winter time power cuts are routinely 10-14 hours a day but can be for as long as 16 hours, with 18 hours being relatively uncommon. Lastly, this electrical rationing is called load shedding and is intimately connected with the country’s political corruption. Allegations of mismanagement concerning the electricity crisis, enforced by 16 hours without power a day, have been launched at all levels of the Nepal Electricity Authority. Because a considerable amount of electricity has been sold to India and China, because partnership deals with foreign investors have been signed and then ignored for over a decade, because the country burns in the summer and freezes in the winter, the NEA has been accused of widespread corruption and misappropriation of finances.

In summary, it is perhaps an adage from antiquity that encapsulates Nepali development best. Festina lente. Make haste, slowly. The confluence of urgency tempered by diligence and deliberation catalyzed by the needs of the people is what will ultimately allow Nepalis from all walks of life to feel as the tourists do, amazed at how truly wonderful the roof of the world is.